Terrorist attacks rock financial markets

By Phil Boeyen, ShareChat Business News Editor

Wednesday 12th September 2001

The world's financial markets are in turmoil following the unprecedented terrorist attacks in the United States, where the World Trade Centre towers have collapsed after being hit by hijacked commercial airliners.

A plane also crashed into the Pentagon in Washington DC and another in rural Pennsylvania. Its target is believed to have been the US presidential retreat, Camp David.

Those world stock markets still trading after the event have suffered some of the biggest drops since the crash of 1987. Frankfurt closed down 8.6%, London fell almost 6% and the Paris bourse plummeted 7.4%.

In the US all air flights have been grounded, large shopping malls are trading limited hours and tourist operators such as Disney have closed their doors.

Investors have been ditching almost all investment sectors except for gold and oil stocks - typically seen as safe havens in such a world emergency.

Insurance companies are also expected to be badly hit as the cost of the attacks will run into billions of dollars. A recent valuation of the World Trade Centre was put at US$1.2 billion.

Tourism and airline stocks will also be severely impacted as travel in the US grinds to a halt.

Air New Zealand (NZSE: AIRVA), already fighting the biggest battle of its corporate life, has cancelled several US flights and revealed that one of the planes hijacked was a code-share with Star Alliance partner United Airlines, flying from Boston to Los Angeles.

The feeder flight was the one that crashed in Pennsylvania, killing all on board, however Air NZ says it has no records of New Zealand nationals being aboard the flight.

One of the major casualties of the disaster is financial services giant Morgan Stanley which leased around 30 floors of the World Trade Centre. The centre is adjacent to the heartbeat of US and world finance, Wall Street.

Australian-based shopping centre owner Westfield America, signed a deal in July to lease the World Trade Centre's retail section for 99 years.

The NZSE has delayed its Wednesday opening time by one hour and will begin trading at 10 am.

Despite the terrorist disaster the US government has tried to calm the financial world this morning, assuring US consumers that banks and the US Federal Reserve are operating normally.

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